A big challenge in growing wealth, is that the assets you acquire only have single purpose utility. You can use it for one thing and one thing only.
Take a rental property for example. You pay a lot of money for, and then you rent it out for a fixed amount. If you’ve done things right, then the rental income pays for your loan and expenses. At the end of the day, if you’re lucky you come away with a little bit of profit and hopefully you’ll turn that liability into an actual asset in ten years.
That’s how it typically works. You get an asset, and it pays you some return.
Assets with Single Purpose Utility
If you’ve ever owned a property, you know it is never this simple. Rates and taxes keep going up, levies always go up, the rental agents keep increasing their fees. Worse than that, the environment can change on you in unforeseen ways leading to huge expense increases. This will destroy your earnings.
However, this is dawning on me only now, but I am starting to see that assets can deliver multiply-purpose value rather than single purpose value.
The Changing Nature of Assets
We’re in luck these days, because with the advent of the gig economy the nature of assets have changed – and that has changed our thinking too.
A couple years back, I bought a small property as backup to mitigate against all the infrastructure issues we were having in South Africa. My main property would get hammered by electricity blackouts and then water outages.
I had another additional property, which was under long term rental so I could never use it when issues arose with my main property. You can’t have your cake and eat it!
I decided to get another small property as backup. Sometimes I would stay in this unit if I was working late or needed to crash. It turned out to be a fantastic backup even though I didn’t use it so much.
Then I put it on AirBNB which worked out great; you’ve got access to the property; you can generate more money, and you can rate guests. Very Nice!
The asset started yielding value as a backup, rental and forced to me think of it as business.
You can have your cake and eat it!
Services like AirBNB and Uber gives us the ability to take our assets and do more with them. Therefore we need to start thinking as businesses and not employees.
Even now during the COVID-19 pandemic, my AirBNB place still generates income, because I’ve developed a great rapport with my long term guest.
If you can manage your car or property as a business, then there is nothing stopping you from buying your next asset into a business and running at such. You’ve now become an entrepreneur.
Crypto currency assets like Bitcoin give you more value now as well. People would complain that you could never get interest on it. They would complain that you could only Hodl and hope it went up in value.
The content you create is an asset too. This post that you reading now is an asset of mine. This post will be on my website https://jae.money, publish0x, Uptrennd, Hive and Read.cash. If people like it I might earn a little bit from it.
Having assets are key to growing wealth.
This modern day age gives us the ability to get more for the assets we have, and it’s our obligation to explore these aspects. And through these explorations we can change our thinking from regular joe soap to extraordinaire entrepreneur.